Zebra Technologies Corporation, together with its subsidiaries, designs, manufactures, sells, and supports direct thermal and thermal transfer label printers, radio frequency identification (RFID) printer/encoders, dye sublimation card printers, real-time locating solutions, related accessories, and support software worldwide. It products are used principally in automatic identification (auto ID), data collection, and personal identification applications. The company also provides mobile computing and advanced data capture technologies and services, which include rugged and enterprise-grade mobile computers; laser, imaging, and radio frequency identification based data capture products; wireless LAN (WLAN) solutions and software; and applications that are associated with these products and services.
Take a look at the 1-year chart of Zebra (NASDAQ: ZBRA) with the added notations:
ZBRA doubled in value from October of 2014 to June of this year. After peaking at $120, the stock started its current decline that now has the stock trading below its key level of $75 (red). The break of $75 should lead to lower prices for ZBRA.
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The Tale of the Tape: ZBRA broke a key level of support at $75. A trader could enter a short position on any rallies up to or near $75 with a stop placed above the level. If the stock were to break back above the $75 level, a long position might be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach